12,000-plus MF Global customer claims deemed valid

The trustee for MF Global's fallen brokerage said he is nearly halfway through the process of determining the validity of more than 25,000 claims from commodities customers burned by MF Global's collapse.

Trustee James Giddens said in a court filing on Friday he has deemed 12,143 claims valid, denying only three. He has another 13,000 claims to get through, according to the filing.

Deeming a claim valid legitimizes the claim itself, but does not guarantee full payback. Giddens will decide to what extent he can make payouts on claims after he finishes determining their validity, according to the filing in U.S. Bankruptcy Court in Manhattan.

Most commodities customers have already received payouts of roughly 72 percent of the value of their accounts, which were frozen when the brokerage's parent, MF Global Holdings Ltd, declared bankruptcy on October 31.

Some claims, Giddens said, were deemed only partially valid, though on average they have been allowed so far at 98 percent of their claimed value.

The trustee said he has also received 841 claims from MF Global's securities customers, but did not say whether he has made decisions on their validity. A spokesman for Giddens could not immediately be reached.

Customers have been in limbo since regulators discovered a significant shortfall in MF Global's customer accounts, prompting investigations by several entities, including the FBI, Securities & Exchange Commission and U.S. Attorneys' offices in New York and Chicago. The company's CEO, former New Jersey Gov. Jon Corzine, stepped down on November 4.

Giddens said in a February report that the shortfall was caused by the use of customer money to cover corporate transactions in MF Global's chaotic final days. He has estimated the shortfall at $1.6 billion.

The case is In re MF Global Holdings Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.

The brokerage liquidation is In re MF Global Inc, in the same court, No. 11-2790.